A spokesman for Leicester City Council told FoodManufacture.co.uk: “The deal has been struck on the condition that planning permission will be granted for a production facility.”

Samworth Brothers’ new chief executive Lindsey Pownall said the factory would not be open until at least 2014.

200 new jobs

It would create 200 new jobs initially and 500 more could eventually follow.

Pownall said: “The land is close to Bradgate Bakery and Walkers Charnwood Bakery, which stand next to each other in Madeline Road.

“It provides a site if we feel there’s a market. It wouldn’t come to fruition until at least 2014.”

She said the site would produce chilled food but said it was too early to be specific about the nature of the products that would be manufactured at the site.

City Mayor Peter Soulsby said: “This is excellent news for the city at a time of severe economic downturn.

Economic regeneration

“Attracting businesses to bring new jobs and economic regeneration to the area will be vital to its success. At a time when every job created really counts, I am delighted that we have now agreed a deal with an important local employer that will really kick-start this process.”